Jeremy Owens is a well-respected Mortgage Banker with Brand Mortgage in Atlanta, GA. We recently caught up with Jeremy to get his take on the top 5 questions we hear from homebuyers about the mortgage process and interest rates.
What's the most important thing a buyer can do in preparation for getting a mortgage?
With the advent of free credit reports, everyone should be reviewing a credit report at least annually for inaccurate information. A buyer should review their credit report in the 6-12 months prior to beginning their home search. A buyer should pay special attention to their debt usage ratio (total of revolving credit account balances/total available revolving credit limit). The debt usage ratio should stay at or below 30%. A buyer should also plan to resolve any outstanding collections as quickly as possible.
What can a homebuyer expect from the mortgage application process?
The mortgage application process can be intimidating. I purchased my first home after I had been a mortgage lender for 3 years, and I was still nervous. Securing mortgage approval and satisfying underwriting conditions is NOT the hard part of the application process. The government has imposed strict oversight and regulations on mortgage lenders. We are now required to document, document, and over document each application. If you are prepared to say “Yes” every time a new document is requested, your application will be easy.
What should a homebuyer look for in a mortgage lender?
Your mortgage lender should be a competent professional, well versed in PURCHASE mortgage applications. Your mortgage lender should also have a local presence in the community you are considering joining. A local lender is better equipped to help move your application through the multiple back room layers of underwriters, processors, and closers. There are no end to horror stories from homebuyers that chose lenders with out of state operations or internet lenders offering “too good to be true deals” only to end up being rescued by a local lender.
Are lending restrictions starting to ease up? If so, why?
Lending restrictions are beginning to ease up slowly as investors are realizing the quality of today’s mortgage is very high. Banks will be more willing to lend as interest rates begin to normalize.
What do you think will happen to interest rates over the next 12 months?
The Federal Reserve has been purchasing billions of dollars in mortgage paper. This has caused interest rates to remain artificially low. As the Fed continues to reduce their purchase on mortgage paper, interest rates should begin to rise to more normalized levels. Mortgage interest rates are still at historical lows, but with the impending rise in rates, now is the time to find a home and secure a mortgage.
Have additional questions? Connect with Jeremy.